Japanese investors have lost faith in the domestic equities market after years of poor returns and deflation. For the market to thrive once more, the flow of money into bank deposit accounts needs to be reversed
In 1965 the dividend yield on the Japanese market averaged 6.0%. Individual investors owned 46% of the market directly allocating 17% of their total household financial assets to equities. Then, dividend yields were an important source of income for the household sector. Today, the dividend yield of the market is 1.0%. Individual investors own 23% of the market directly and only 8% of their financial assets are invested in equities. Over the long-term, Japanese companies' inability or unwillingness to raise dividends in line with increases in net worth has caused investors to seek other ...
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